Updated over 10 years ago on . Most recent reply
Down Payment Partner
Does anyone have any experience with down payment partner for buy and hold deals? We have someone who is interested in working with us but is looking for more than an 8% return on their investment.
How it works with us is the investor would front the down payment and we would basically sign a loan that would repay that money in four years at 8%per year. They would have a lien on the property just like the bank. This is the worst case scenario for that investor. We typically aim to find deals that are below market that we refinancing with a private lender after the property has been rented for 90 days. At that time the investor gets their money back plus 8% and we would go into another property with them.
Depending on the time of year the property is purchase we could reuse that investors down payment up to 3 times per year.
To get to the point, we have an investor who is interested but wants a portion of the cash flow for the property in addition to the 8%. Has anyone ever offered this?
Looking for ideas how some of you guys pay back your down payment partners. Is 8% not enough?